State-Owned Enterprises: Performance, Oversight and Fiscal Risks — Exploring Best Practice

State-owned enterprises (SOEs) are integral to many countries’ economies, providing essential public services in sectors such as electricity, water, gas, and transportation. Reflecting the legacy of state-run economies, many countries in the JVI region maintain a particularly strong SOE presence. The share of SOE assets in GDP ranges from 40 percent in many Central, Eastern and Southern European countries to above 100 percent in parts of Central Asia. 

SOE activities can have major fiscal implications and often generate sizable fiscal risks, typically concentrated in a few large firms that are not always monitored comprehensively. In most countries, Ministries of Finance (MOFs) are responsible for managing fiscal costs and risks, while ownership and governance roles are carried out by other ministries or specialized government agencies. This fragmentation can create gaps and inconsistencies in SOE oversight, contributing to losses, debt accumulation, capital erosion, and the buildup of fiscal risks. 

This new five-day course on SOE oversight, ownership, financial performance, and fiscal risks was designed by the IMF Fiscal Affairs Department (FAD) to address these challenges by strengthening participants’ ability to assess SOE financial performance, understand related fiscal risks, and enhance financial oversight. The course also aimed to synchronize approaches between MOFs and other entities and foster greater collaboration across agencies responsible for SOE governance and ownership functions.

The inaugural course generated strong interest, attracting over 160 applications, and bringing together 30 mid- and senior-level officials from 18 JVI countries, representing ministries of finance, economy, and state ownership entities. Participants engaged in a blend of lectures, hands-on exercises, and case studies, including practical application of the IMF SOE Health Check Tool. Sessions covered key aspects of SOE oversight and ownership, including fiscal risks, quasi-fiscal activities, financial performance and key performance indicators, corporate governance and boards, reporting and disclosure. They were complemented by five country presentations from Armenia, Georgia, Montenegro, Romania, and Ukraine. Real-world examples, teamwork, and active discussions created a highly interactive learning environment.

The course received exceptionally positive feedback from participants, who emphasized that it filled a long-standing gap by linking SOE fiscal and financial oversight with broader ownership and governance functions across government institutions.

Given the strong demand and positive feedback, the course may be offered regularly and extended to other regions. Participants looking to enhance their knowledge of fiscal risks  may be interested in registering for the upcoming course at the JVI on Managing Fiscal Risks – A Hands-On Approach, which will provide a deeper dive into fiscal risk identification, assessment, and mitigation.

Natalie Manuilova, Senior Economist, IMF